Renting W/D to Tenants

[Joshua Harmon]

I have been weighing my options on what I should do about the increased water bills in my market. Unfortunately, water bills have increased almost 3 times over the past year or so in Fort Smith, and we just got word that there will be another increase soon. Although RUBS has been almost universally implemented, there is not one apartment in our area that uses this strategy. 

As an apartment owner, I have 2 options. Option 1 is to sell. Option 2 is to find a solution. I will be closing on an 8 unit apartment in less than 2 weeks and someone suggested an awesome strategy. Lease w/d to tenants.

I could structure the lease where tenants must sign a 1-year lease on equipment. So let's just say that I am able to purchase a w/d for $300. The tenants would be responsible to pay $25 monthly in order to do laundry in their units. 

The obvious positive to this strategy is the tenants pay for the equipment within 1 year and we would be able to add this revenue to our NOI. I the other hand, we will be responsible for repairs and maintenance to the equipment is something goes wrong.

We are the only apartment complex within a .5 mile radius that has w/d hookups in the units so this could work.

Does anyone have any experience with this strategy? How did it work or not work out for you? Any other suggestions? Any pitfalls that I could face in the future?